Esmark, Union Agree To Contract

Deal paves the way to restart of Yorkville facility early next year

December 7, 2012

YORKVILLE - The Upper Ohio Valley's economy got a little boost Thursday when union steelworkers voted 194-24 to accept a contract from Esmark Inc. in hopes of getting the Yorkville plant going early next year.

"This is the only one of the RG plants that was sold to an operator. In that, we feel fortunate to have a chance to make this work," United Steelworkers Local 1223 President Jerry Conners said.

Esmark acquired the former RG Steel Yorkville cold-rolled finishing mill during a bankruptcy court-supervised auction in August, along with RG Steel's 50 percent interest in the nearby Ohio Coatings Co.'s tin plate production facility. The name of the Yorkville facility - long part of the Wheeling-Pittsburgh Steel Corp. business - is now the Ohio Cold Rolling Co.

Article Photos

File PhotoEsmark Inc., which purchased the RG Steel Yorkville plant for about $4.7 million and rebranded it the Ohio Cold Rolling Co., has a new deal with the United Steelworkers on a deal that could restart the facility next year.

"Ohio Cold Rolling Co.'s focus will be on serving the light gauge and narrow width coil niche in the marketplace, and together with our Ohio Coatings Co. subsidiary we expect to be a premier supplier of both cold-rolled and tin plate products," said Tom Modrowski, chief executive officer of Esmark Steel Group, the steel operating subsidiary of Esmark Inc.

Modrowski said a restart of the Yorkville facility will contribute to Esmark's long-term strategy to offer its U.S. customers a broader range of steel products and value-added services.

"We're very pleased that after months of negotiations, the union members found the contract offer to provide for a strong wage, benefits and profit sharing package," he said.

As Conners said, RG sold the Mingo Junction, Steubenville, Martins Ferry and Beech Bottom plants to companies that are either looking to scrap the mills or sell them to someone else to operate.

Esmark previously owned all the former Wheeling-Pitt facilities before selling them to Russian steelmaker OAO Severstal for $1.23 billion in July 2008. Severstal, after idling the Steubenville and Mingo plants in 2009, later sold these plants to RG, which liquidated the assets this year.

Modrowski said some of the key economic provisions of the collective bargaining agreement call for wage increases over the term of the four-year agreement, comprehensive health care for workers and their families, financial contributions to the Steelworker Pension Fund and participation in a Voluntary Employee Beneficiary Association Trust to provide health care benefits for retired union workers.

Even though Conners agrees the contract has incentives and provisions for wage increases, based on how productive the plant is, he admitted the average worker wage is taking a hit in the short term. He said the average worker wage in the Esmark deal is $21.64 per hour, down from about $26 per hour under the last RG agreement.

"No one is pleased to go backwards on their wages, but we are pleased to have a job," Conners said.

Conners said a very limited crew is at work in the plant now, as he said Esmark is installing some new equipment.

"We are hoping and believing we can start in the first quarter," he added.